To meet the National Development Plan (NDP) target of creating 11 million jobs by 2030, South Africa needs over 49,000 SMEs growing at a rate of 20% per annum. In comparison, the country would need no less than 8.2 million small and micro-enterprises to create the same number of jobs.
This was revealed through the Endeavor jobs calculator, a global tool developed by the International Labour Organisation (ILO), National Statistics Agencies and Endeavor Insights, which takes into account the different factors that are essential for job creation. Endeavor is a global entity that specialises in helping high-impact businesses realise their big dreams, which includes scaling their businesses to become dominant players in local or global markets.
Catherine Townshend, Managing Director at Endeavor South Africa says, “The Endeavor job calculator can estimate how many entrepreneurs, i.e. businesses, are required to create new employment opportunities. Endeavor believes that by providing much-needed support to scale up businesses by way of helping them think bigger and make more informed decisions, they are able to multiply their success.”
“This in turn has a net positive job-creation impact on the local economy. Based on South Africa’s urgent need to create jobs at a rapid scale, it is clear that the country needs more support for businesses that have the potential to scale and create jobs much quicker than micro-enterprises or start-ups,” she adds.
This view is supported by Mike Vacy-Lyle, CEO of FNB Business, “South Africa has reserved large sums of funds to boost business development; therefore, we need to take a realistic approach to ensure that such an investment yields the desired results. It is important to note that calling for more investment in scalable SMEs does not mean that micro-enterprises should be neglected, those businesses will still need to be developed, over a longer lead time.”
Townshend explains that evidence of maximising the potential of scalable SMEs can be found in the success achieved by Endeavor SA through its network of entrepreneurs. “Our active portfolio of 22 South African Endeavor entrepreneurs created nearly 5,000 new jobs in 2014 and contributed over R1 billion to the local economy. These successes are replicated in other markets and we are increasingly witnessing a global shift towards providing support for scale-ups.”
Vacy-Lyle says FNB Business is proactively collaborating to unearth the potential of South Africa’s scale-ups. In 2014, the bank partnered with Endeavor SA to introduce the FNB Business Innovation Awards. The focus of the awards is to showcase the depth of innovation among scalable business in South Africa. The recipient of the award will get an opportunity to present their business ideas to renowned global business leaders at Endeavor’s prestigious International Selection Panel (ISP) in San Francisco.”
Source: SA the Good News via Reuters